Stemming the spills: Guiding framework for undertaking national spillover analyses

May 2018 - Revised Version Acknowledgements

This report has been researched and written for ActionAid by Martin Brehm Christensen and edited by Mark Curtis, Hannah Brejnholt Tranberg and Kasia Szeniawska. ActionAid would like to thank all of those who contributed to the research, especially Attiya Waris, Fran- cis Weyzig, John Christensen and Martin Hearson. A special thank you goes also to Diarmid O’Sullivan.

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2 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Contents

Abbreviations and acronyms 4

Executive summary 5

Introduction 7

Rationale for this Guiding Framework 7

Human rights, democracy and national tax spillover analyses 7 – Why spillover analyses are necessary 7 – The impacts of EU tax policies on in developing countries 8 – The obligations of EU member states on tax and Policy Coherence for Development 9

Chapter one: Methodological recommendations 10

The Dutch and Irish analyses 10

Two existing theoretical frameworks 10 – The IMF’s 2014 Staff Report, Spillovers in International Corporate Taxation 10 – The 2017 APPG/SPERI “Tax Spillover: A New Framework”, by A. Baker and R. Murphy 11 Methodological considerations 11 – The indirect nature of tax spillovers 11 – Analyses must be country-specific 12 – Benchmarking should not primarily be used to assess tax spillover effects 12 – Different impacts on different parts of society 12 – The importance of an interpretive approach 12 – A purely quantitative methodology has its limitations 13 – A purely qualitative methodology has its limitations 13

Recommendations for an analytical framework for national tax spillover analyses 13

Chapter two: Scope and content recommendations 14

Domestic rules of EU member states – aggressive tax planning structures 14 – Negative spillovers 15 – Positive spillovers 16

EU member states’ activities abroad 17 – Spillovers from treaties 17 – Spillovers from development finance institutions 18

Chapter three: Process recommendations 19

– Actions needed independent of any spillover analysis 19

Conclusion 20 – Methodological recommendations 20 – Scope and content recommendations 20 – Process recommendations 20

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 3 Abbreviations and acronyms

APA Advance Pricing Agreement ATP aggressive tax planning BEPS base erosion and profit shifting CBCR country-by-country reporting CEDAW Convention on the Elimination of all forms of Discrimination against Women CFC controlled foreign (s) CIT corporate CSOs civil society organisations DFIs development finance institutions DTTs double taxation treaties ECAs credit agencies EU European Union FfD Financing for Development IBFD International Bureau for Fiscal Documentation IMF International Monetary Fund MNE multinational enterprise IP OECD Organisation for Economic Co-operation and Development ODA official development assistance R&D research and development Spillovers refers to spillover effects Spillover analysis refers to national tax spillover analysis USD US dollar(s) VAT value added tax

4 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Executive summary

Why are tax spillover analyses Recommendations for needed? conducting tax spillover analyses A ‘tax spillover’ occurs when a tax rule or practice in one country directly or indirectly affects tax revenues, Specifying the precise national mechanisms for rules or practices in other countries. Thus, tax policies analysing spillover effects is difficult due to country- do not only affect the country imposing them – they specific contexts and the complex, often changing can affect others, often adversely. nature of tax processes.6 Therefore, instead of presenting an exact model, this Guiding Framework The last decade has revealed scandal after scandal presents recommendations for the factors that national exposing how multinational companies use the tax tax spillover analyses should take into account in system of one country, or a combination of the tax terms of methodology, scope and process. systems of several countries, to avoid paying tax in a 1 third country. Yet, currently, there are few mechanisms This Guiding Framework, which has been developed to understand how the tax policies of an individual with inputs from partners from across Europe and country affect other countries. Africa, argues that spillover analyses need a broader scope than those so far conducted by the Netherlands ActionAid believes that understanding and addressing and Ireland, and should take into account human tax spillovers is key to fair and responsible tax policies. rights impacts, transparency measures, international With this new report, we propose a guiding framework cooperation and also potentially positive spillover for EU member states to conduct national tax spillover effects. analyses and aim to kick-start a wider debate on this important topic. In order to turn improved knowledge into improved policy decisions, more dialogue is needed across It is widely recognised by the IMF, the OECD and national borders and across ministries and institutional other institutions that tax spillovers are sizable, “silos” within individual EU member states. ActionAid especially for developing countries.2 Tax is central hopes that the recommendations will encourage such to the financing of the 2030 Agenda for Sustainable dialogues. Development,3 to which all EU member states have committed. The commitment to policy coherence for development by EU member states is meant to ensure Chapter 1: Methodological that all their policies take account of the impact on recommendations developing countries, with taxation as one of the key 4 areas. To make informed policy choices, EU member A national tax spillover analysis should include: states need to analyse their tax policies in order to improve understanding of these extra-territorial • A clear and detailed formulation of the intended effects. For this reason, a number of actors, including objectives of the spillover analysis 5 the , are calling for EU member • A broad qualitative analysis of the policy areas states to conduct national tax spillover analyses to (listed in Chapter 2) most likely to have spillover honour their international commitments. effects on the tax revenues of developing countries and their capacity to meet sustainable development goals and human rights obligations • Use of quantitative methods where possible so as to make the findings as rigorous and objective as possible • An interpretive and comparative analysis of the

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 5 qualitative and quantitative findings that provides Chapter 3: Process recommendations the basis for assessing the country’s commitment to policy coherence for development Chapter 3 presents a list of principles recommended • Identifying one or more case studies that can for undertaking spillover analyses: subsequently be conducted • All relevant government departments should be involved in preparing the analysis, including Chapter 2: Scope and content the Ministries of Foreign Affairs, Business and recommendations Finance, and the administrative departments responsible for taxation, aid and development Chapter 2 lists the most important policy measures policies. that a national tax spillover analysis should take into • The spillover analysis should cover all tax rules account. These include domestic rules that enable and practices of member states which may give rise to spillovers in developing countries, aggressive tax planning, such as “ring-fencing” including those which have indirect effects. structures, rules indirectly affecting the effective tax • There should be agreement among all the rate for corporate income, capital gains, royalties, stakeholders on what data needs to be collected interest, dividends, as well as IP rules, R&D rules and for the study and an assurance that all those with rules. A spillover analysis should also access to this data will provide it. take into account features of the national tax system • The analysis should include the participation of that have been negatively reviewed in the Financial relevant stakeholders, such as parliamentary Secrecy Index.7 committees, civil society groups, academics and the business community. A spillover analysis should also address other bilateral • There should be a period for a public consultation activities of EU member states, such as DTTs and the and written submissions, and these inputs should role of their DFIs. be explicitly considered in the final report. • There should be a period of debate and Importantly, a spillover analysis should also consider scrutiny of drafts of the analysis produced, and the many potentially positive spillover effects from, for transparency throughout the process. example: • An external, independent party should be contracted to conduct the spillover analysis. • Transparency measures, including publishing • The government should make a commitment to the core elements of tax rulings, CBCR filings publishing the analysis in full. of companies and the identity of beneficial • There should be a commitment on the part of the ownership of bank accounts, trusts, and property government commissioning the analysis to act • Anti-abuse measures, including CFC rules and on its findings. general anti-avoidance rules • International cooperation, including automatic Undertaking a spillover analysis should not cause a exchange of information about financial accounts, government to postpone changing policies already CBCR, APAs and other tax rulings known to be harmful.

6 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Introduction

Rationale for this Guiding all have an interest in shaping the focus of a spillover analysis, especially regarding what to include and Framework exclude. However, in a democracy, one would and should expect decision makers to be open about The intention of this report is to offer encouragement why they choose a given focus and what interests and guidance for decision makers in EU member are served by that choice. If spillover analyses are states to undertake spillover analyses of the effect of to achieve their aim of protecting the national tax systems on developing countries. It aims base of developing countries, then they need to be to encourage dialogue on this issue and strengthen rigorous, comprehensive and transparent along the the commitment of EU member states to policy lines suggested in this report. coherence for development (PCD). We also hope this framework can be used by journalists, civil society and governments in developing countries as a reference when discussing with EU governments which policy areas and key questions a spillover analysis should Human rights, democracy and address. national tax spillover analyses

This Guiding Framework has been developed with inputs from more than 20 academics, representatives Why spillover analyses are necessary of civil society organisations, politicians and state officials. The intended audience is decision makers EU member states have committed themselves in EU member states, in particular in Ministries of to supporting development around the world, Finance, Foreign Affairs and Economy – or their most recently in the 2030 Agenda for Sustainable equivalents – as well as in administrative departments Development and the Sustainable Development Goals, responsible for taxation, aid and development. which call for ending poverty and improving health and education.8 Many developing countries lack adequate ActionAid hopes to encourage intergovernmental education, health and other services and increased tax dialogues about the basic values and principles of revenues are urgently needed to increase investment taxation. Given that EU countries have shared values in these. Domestic resource mobilisation, including with regard to human rights, democracy, and a state’s tax, was put at the centre of the last UN International rights to sovereignty, there is potential for agreeing Conference on Financing for Development, which took on a number of fundamental principles for taxation place in Addis Ababa in July 2015.9 which could guide interstate tax relations within and beyond the EU. Designing a state’s tax system is a However, the last decade has revealed scandal deeply political issue and cannot be treated as a after scandal of companies exploiting discrepancies purely technical matter. ActionAid regards agreeing between the tax systems of different countries to on such principles as both a logical and necessary avoid paying tax in other countries.10 For example, starting point for any genuine reform of the current research by ActionAid found that Malawi lost US$43 international tax system. million in revenue over six years from a single company– the Australian mining firm, Paladin, which In this report, ActionAid defines anational tax spillover used the Dutch tax system to avoid paying on analysis as an investigation of the effects that the interest payments and management fees.11 The DTT tax system of a given country (country A) has on the between the Netherlands and Malawi (which has capacity of another country (country B) to meet the since been renegotiated) reduced these withholding sustainable development goals and its human rights taxes to 0%. In Malawi the lost revenues could have obligations. A national tax spillover analysis will always paid for 431,000 annual HIV/AIDS treatments12 or be contextual and tailored to the given country and 17,000 nurses’ salaries for a year.13 The LuxLeaks its situation. Different interest groups and businesses scandal14 showed that tax rulings drastically reduced

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 7 the effective tax rates of hundreds of multinational The impacts of EU tax policies on human companies in , sometimes to single rights in developing countries figures.15 The SwissLeaks scandal, covering one bank in one European country, laid bare financial information The fundamental principle of democracy is that the on more than US$100 billion from 106,000 clients in state is governed by the people for the people.25 16 17 203 countries; the Financial Transparency Coalition The intended purpose of taxes is to finance state estimated that the money concerning Sierra Leone activities. Central to the Universal Declaration of 18 could finance 19% of the country’s health budget. Human Rights is everyone’s right to a minimum level of “living standards”,26 such as article 25 on the rights Research on global financial flows makes clear to housing, medical care and security in the event that reducing the negative spillover effects from of sickness and old age, or article 26 on the right could make a difference to to education.27 Thus, as Dr Attiya Waris from the people in developing countries. For instance, the University of Nairobi has pointed out,28 human rights OECD acknowledges that the impact on developing and taxation in democratic states have the same end countries of cross-border is likely to purpose: the improvement of human life. Whereas the 19 exceed total aid flows by a considerable margin. The first expresses itself universally, the other expresses IMF estimates that developing countries lose $200 itself domestically, but the relationship is strong and billion to tax avoidance every year.20 increasingly recognised by states and international organisations.29 A key tax spillover results from international ,21 with nation states engage in a “race to In the 2014 UN Report of the Special Rapporteur the bottom” on rates of corporate taxation, in which on extreme poverty and human rights,30 Magdalena mobile capital scours the world in search of tax breaks Sepúlveda Carmona presented , and and subsidies – and which undermines the tax bases particularly taxation policies, as a major determinant of all countries and reduces the public revenues in the enjoyment of human rights. The report analysed needed to fund public services.22 Another spillover how the principles of non-discrimination, equality and from tax competition is tax incentives; calculations the of international cooperation should inform by ActionAid suggest that US$138 billion is lost taxation policies at the global and national levels. With every year through the tax incentives that developing regard to international cooperation and extraterritorial country governments offer to large businesses.23 impact, the report recommended that each state should refrain from any conduct that impairs the ability The IMF’s 2014 analysis, Spillovers In International of another state to raise revenue as required by their Corporate Taxation, reaffirms that spillovers are human rights commitments and cooperate in creating especially marked and important for developing an international environment that enables all states to countries.24 It also concludes that: tax rules and fulfil their human rights obligations.31 practices in one country do indeed affect the rules and practices on tax in other countries; these spillovers In 2016, Switzerland was criticised for breaching can matter for macroeconomic performance; and that its extraterritorial obligations under Article 2 of spillover effects on corporate tax bases and rates are the Convention on the Elimination of all forms significant and sizable. of Discrimination against Women (CEDAW).32 Switzerland was requested to “provide information on Therefore, improving the understanding of these the measures taken to ensure that the State party’s spillovers is important for EU member states, both to tax and financial secrecy policies do not contribute protect their own tax bases and to adopt responsible to large-scale tax abuse in foreign countries, thereby tax policies in relation to developing countries. having a negative impact on resources available to realise women’s rights in those countries”.33 It is also important to stress that, since some EU member states have tax policies that obviously have negative spillovers on developing countries, the conduct of a spillover analysis should not excuse a government from taking immediate action to address its harmful policies.

8 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Table 1: Timeline of EU member states’ commitment to PCD

Year Institutions Commitment

1992 EU Treaty of Maastricht

2000 UN UN Millennium Declaration – Goal 8

2002 OECD Action for a Shared Development Agenda

2006 EU EU Consensus for Development

2008 OECD Ministerial Declaration on PCD

2007 EU Lisbon Treaty, Art. 208

2011 EU Agenda for Change

2012 OECD Strategy on Development

2015 UN Agenda 2030 and Sustainable Development Goals, Goal 17

2017 EU European Consensus on Development

The obligations of EU member states on • encourage further international cooperation on tax and PCD tax matters

The Lisbon Treaty 2007 article 208 made PCD a legal The 2015 EU Staff Working Document, Collect More 41 obligation, requiring EU member states to take into – Spend Better, emphasises the shift that took place account the impacts of their domestic policies on at the third Financing for Development Conference in 42 developing countries and to pursue synergies across Addis Ababa in 2015 – stressing that domestic public all policy areas. PCD has since been recognised in all finance should be at the heart of the efforts of every key EU development documents as an important tool country to achieve key objectives. Moreover, this was in promoting sustainable development.34 part of the process which led to the adoption of the 2030 Agenda for Sustainable Development.43 The EU Since 2010, domestic revenue mobilisation in (together with development partners) hereby launched 44 developing countries has been one of the key priorities the Addis Tax Initiative, in which countries declared in EU development policy,35 further strengthened in their commitment to enhancing the mobilisation and the 2015 Collect More, Spend Better agenda.36 Given effective use of domestic revenues and improving the their strong and often direct impact on the capacity fairness, transparency, efficiency and effectiveness of 45 of developing countries to generate , tax their tax systems in order to address inequalities. policies have rightly become increasingly central to PCD considerations in EU member states.37 PCD has also been recognised in a number of OECD processes, especially in the aid effectiveness In 2015, tax issues were explicitly considered in the debates, the UN Millennium Declaration and the UN ’s EU Report on PCD, which Agenda 2030. The importance of non-aid policies listed the Tax Transparency Package (COM(2015) 135 for development was also acknowledged in 2011 final) and the Action Plan for a fair and efficient tax at the High Level Forum on Aid Effectiveness in system in the EU (COM (2015)302) as the EU actions Busan, where the representatives of developing and which were supposed to increase policy coherence for developed countries agreed to reduce the dependence development in this area.38 The European Parliament of developing countries on aid and to examine the supported these measures and took an even stronger interdependence and coherence of all public policies position on tax and PCD in its resolution on the 2015 EU – not just development policies.46 Report on PCD 39 as well as in its resolution on tax and development,40 calling on the EU to, among other things: A deeper understanding of tax spillovers is needed to translate these political commitments into • conduct an impact assessment and spillover corresponding policy actions. Spillover analyses are a analysis of the new EU tax legislation technical necessity; to meet their PCD commitments • ensure that pay their fair share of taxes EU member states need to analyse their policies • promote and operationalise the principle of PCD and improve the understanding of the extraterritorial in tax matters on a global level effects of their national tax systems.

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 9 Chapter one: Methodological recommendations

This chapter presents recommendations on the out that little attention was paid to tax dodging analytical steps and methodological elements structures where profits end up largely untaxed in the needed to conduct national spillover analyses. These Netherlands itself, such as those involving deductions recommendations are partly based on an assessment for so-called informal capital, often in combination of two country spillover analyses that have already with Dutch tax rulings providing advance certainty been conducted – by the Netherlands and Ireland - about the use of aggressive tax planning structures.48 and on two existing theoretical frameworks. Like the Dutch study, the Irish study49 did not suggest revisions to the Irish tax system. It found that the domestic tax system in general did not facilitate The Dutch and Irish analyses conduit structures that lead to a loss of revenue for developing countries. The Irish study was broader Two national tax spillover analyses are known to in scope, but less detailed, since the Irish Central have been conducted by EU Member States. In 2013 Statistics Office did not provide access to unpublished the IBFD and the School of Economics of Utrecht country-level data in the way the Dutch central bank University carried out a research study into Dutch had done. Hence, the question has been raised as tax treaties with developing countries for the Dutch to whether similar data could and should have been Ministry of Foreign Affairs. In 2015, the IBFD was made available by the Irish government.50 again contracted by the Irish Department of Finance to produce an analysis of the Possible Effects of the The study was criticised for ignoring Ireland’s role in Irish Tax System on Developing Economies. Both driving down global corporate income tax rates, and studies focused on a select number of developing - like the Dutch study – was also criticised for having countries and the impact of DTTs on investments and a too narrow, transaction-specific focus, ignoring capital flows with those countries. The study also Ireland’s systemic role in relation to the tax systems of included spillovers from some parts of the domestic other countries, especially countries within Europe, as tax system. In both cases, the decision to carry out a demonstrated by the LuxLeaks revelations in 2015.51 national spillover analysis was prompted by calls from CSOs. In both cases, the responsible ministry and the IBFD bemoaned the lack of prior experience and models to guide the research process and design. In Two existing theoretical addition, both analyses were subsequently criticised for not considering important aspects of spillover frameworks effects. There are at least two existing theoretical frameworks

The Dutch study47 compared the DTTs between for conducting tax spillover analyses. the Netherlands and a select number of developing countries with the DTTs these developing countries have with other countries. It concluded that the anti- The IMF’s 2014 Staff Report,Spillovers in abuse provisions of the Dutch tax treaties needed to International Corporate Taxation52 be revised, but that they were no worse than the other treaties and that no changes were needed in terms The IMF’s framework builds on the literature and on of their content or their interaction with other aspects the experience of the IMF’s technical advice projects of Dutch . The methodology and findings were and discusses a range of tax policies, including tax subsequently criticised, with commentators pointing treaty networks and mismatches between different

10 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . national tax systems. The analysis focuses on The 2017 APPG/SPERI, “Tax Spillover: A general international tax spillovers but not bilateral New Framework”, by Andrew Baker and 53 spillovers. It presents a quantitative methodology Richard Murphy57 that distinguishes between three types of spillovers: (1) strategic spillovers, (2) base spillovers due to real The APPG/SPERI framework is broader than the IMF’s activities and (3) base spillovers due to profit shifting. and allows for a more comprehensive assessment of the vulnerabilities a national tax system faces from 1. Strategic spillovers. These refer to the effect of international spillover effects and the spillover risks it changes in one country’s on the tax rates generates for other countries. Baker and Murphy stress of other countries. The IMF’s methodology uses that their model is provisional and aims to address the annual data on corporate income tax (CIT) rates in challenges of the IMF-inspired quantitative approach 103 countries, excluding oil-dependent ones, for that both the Netherlands and Ireland applied. the period 1980–2013. It uses statutory CIT rates and looks at country-specific responses modelled Methodologically it recommends a model using as a function of the previous year’s tax rates in all qualitative survey inputs and perception data. other countries. The analysis finds a substantial To address the inherent weakness of perception country response: for OECD countries, a one indices the APPG/SPERI framework suggests percentage point decrease in the statutory CIT using complementary assessment questionnaires rates of other countries generates, on average, a completed multiple times across a representative cut of 0.7 percentage points in response, and for sample of informed respondents across stakeholder developing countries, too, there is evidence that a groups. This would enable the construction of an is taking place among certain index to rank states and, by allowing scores to be regimes. compared, to rank the relative risk that one country poses to other countries. It suggests a comparative 2. Base spillovers due to real activities. These international benchmarking exercise producing a concern the effect of changes in a country’s tax scorecard system that would be a prototype for rate on the tax bases of other countries due to ranking countries’ tax systems. shifts in real economic activity. The methodology used here is more complex and relates changes in a country’s corporate tax base to the average tax rate of all other countries one year before.54 Again, the analysis shows a substantial spillover: Methodological considerations if the average tax rate of all countries falls by 1 percentage point, the average country’s corporate Based on the models above and our own research, tax base is reduced by 3.7%. This amounts to we believe there are certain key methodological quite substantial spillovers, considering that CIT considerations which should be included in shaping rates worldwide have fallen by some 5 points over spillover analyses. We highlight seven below. the last decade.

3. Base spillovers due to profit shifting. These 1. The indirect nature of tax spillovers refer to the effect of changes in a country’s tax rate on the tax bases of other countries due to The experts interviewed for this report all emphasised profit shifting. Analytically, the main difference to how important indirect spillovers are. One reason is that spillovers arising from real activities is that the corporate tax planning often involves the exploitation analysis relates to changes in a country’s tax base of tax rules and treaties in multiple jurisdictions, not to the tax rates of a list of tax havens, assuming just the home country of the corporation and the that profits are mainly shifted into tax havens. destination country for its investment. Another reason The chosen list of tax havens55 is much narrower is that, as the IMF points out, tax rules and practices than empirically based lists such as the Financial in one country can help to drive down effective tax Secrecy Index.56 However, the IMF analysis still rates in all other countries – an effect which is distinct finds that the base erosion effect due to profit from the direct effect of those rules or practices on shifting is as large as that of real activities. any specific country. There is an indirect dimension

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 11 both in the origin and in the impact of tax spillovers. 4. Different impacts on different parts of These indirect spillovers need to be a key part of any society national analysis. Tax spillover analyses should consider who is impacted One weakness of the Dutch and Irish studies is that by changes. The impacts of tax spillovers they both used a quantitative analysis linked only to on human lives are also complex and indirect, and direct investments in and capital flows to selected different types of taxes can affect different parts of developing countries. But there are other ways in society in different ways. International tax spillovers which spillovers occur.58 If data only points to direct influence the volume, composition and relative effects,59 an analysis may ignore the indirect systemic financial contributions of different types of taxes and effects like the “”60 or “Double Irish”,61 the nominal and effective rate of different types of taxes.65 Developing countries have often responded which involve an interaction between these countries to changes in international tax regimes by offering tax and other jurisdictions, not just between them and the incentives to foreign investors while at the same time destination countries for corporate investment. increasing tax revenues from taxes paid by ordinary people, such as value added tax.66 In some cases, this, in effect, transfers revenues from people to 2. Analyses must be country-specific corporations.

Specifying in advance the precise mechanisms The effects of tax spillovers can also felt by people – through which spillovers can occur and the precise either positively or negatively - because the tax system tax rules and policies to be analysed is difficult due influences fiscal transparency, public accountability to the potentially dynamic, multivariate nature of tax and public expenditure, which again impacts on basic processes and the diverse nature of tax systems in democratic rights and the fulfilment of human rights different countries.62 It is obvious that instead of a such as health and education.67 It is also important to one-size-fits-all recipe, spillover analyses must be consider this in analyses. designed according to the country-specific interplay between rules, regulations and policy objectives of both developed and developing countries.63 5. The importance of an interpretive approach

3. Benchmarking should not primarily be The origin of many tax spillovers is tax avoidance, used to assess tax spillover effects which, by definition, uses legal regulations that are not intended to give rise to such tax avoidance.68 Thus, merely looking at the intended objectives of a tax rule The Dutch and Irish studies compare the national will not necessarily reveal how it can be misused for tax system in question to those of similar countries. tax avoidance purposes. This means that a spillover ActionAid argues that spillover effects should not analysis needs to include an interpretive approach primarily be assessed by benchmarking them to to how tax rules are being misused not just a narrow “similar countries” or to an international average.64 assessment of the national legislation. Spillovers need to be assessed in absolute terms,

otherwise any tax rule or treaty following an This also leads to the next point: international norm could be deemed as acceptable and not having undue spillovers. Yet, certain harmful practices which encourage tax avoidance, such as 6. A purely quantitative methodology tax treaties that severely limit withholding taxes or has its limitations offer ultra-low tax rates for certain types of corporate income (such as “patent box” regimes for income from For a number of reasons many spillovers are difficult intellectual property), are so common that they have to measure quantitatively: become international norms. So too has the relentless cutting of corporate tax rates in many countries, • By definition, tax avoidance uses legal regulations which, we would argue, produces negative spillovers. in unforeseen ways. Thus, and as noted above,

12 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . spillover analyses cannot only focus on the “letter Recommendations for an of the law” but also need an interpretive approach. • There are data limitations due to the inherent analytical framework for complexity of taxation, and/or institutional national tax spillover analyses limitations preventing data from being collected or shared even where it is technically possible to This Guiding Framework does not prescribe an exact obtain it. methodology (cookbook or checklist) for how EU • Many important aspects of tax have a moral member states should conduct their spillover analyses. dimension and are thus inherently subjective. However, drawing on the IMF’s quantitative framework An example is the value placed by a democratic and the APPG/SPERI’s qualitative framework, and our own research, ActionAid recommends a holistic society on being able to decide its own policies research design that includes the following elements: rather than being unduly influenced by others. • There are practical constraints including available 1. A clear and detailed formulation of the intended resources. Given the nuanced nature of tax objectives of the spillover analysis. This would spillovers, pursuing a quantitative methodology strengthen accountability and enable a clearer will often require sizable human and institutional evaluation of the outcome. resources, and there is no guarantee that a final conclusion will be reached. Thus, resources 2. A broad qualitative analysis of policy areas can often be better spent on a method using (listed in Chapter 2) most likely to have spillover quantitative analysis in combination with case effects on the tax revenues of developing studies and/or qualitative methods. countries and their capacity to meet sustainable development goals and human rights obligations. Although there are limitations to using a quantitative It goes without saying that the objectives and focus of the analyses need to be reasonably methodology, the latter can still be useful. Analyses comprehensive – a too limited focus may lead should at the very least evaluate techniques for to an overly light research process leading to assessing the quantitative impact on (i) capital politically convenient conclusions. investment and in goods/services, (ii) other countries’ tax revenues from: strategic spillovers from 3. Use of quantitative methods whenever feasible CIT rate changes, bilateral variables, various to make the findings as rigorous and objective as IP tax breaks, and a range of anti-avoidance measures possible. The quantitative analysis should focus (such as CFC rules). on those policy areas identified by the qualitative analysis as the most risky. The types of effects to be analysed should include the financial volume, 7. A purely qualitative methodology has rate and composition effects in developing countries.69 It could include using dummy its limitations variables to inform and guide an interpretive analysis of more indirect impacts on human rights The weaknesses of a purely qualitative approach and democracy in developing countries. include: 4. An interpretive and comparative analysis of • Relying on the subjectivity of the experts and the qualitative and quantitative findings should informants who conduct the analysis and/or provide the basis for assessing the commitment respond in surveys to policy coherence for development of the • Increased risk that the conclusions will lack country in question. Overall, the analysis should substantiation by, for example, failing to provide answer the key question: what is the influence hard figures or solid evidence of impacts of the member state’s tax policies on developing countries, especially in light of its international • Risk of focusing too much on qualitatively commitments? This part of the analysis should harmful rules and regulations without knowing include inputs from different stakeholders the practical relevance of those same rules and (including perspectives from business, human regulations, i.e. how much they are actually rights and developing countries) to ensure there exploited by companies and individuals is a range of views in the analysis.

We therefore believe that it is essential to use 5. Identification of one or more case studies, such a combination of a quantitative and qualitative as particular tax treaties, that can subsequently approaches. be conducted.

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 13 Chapter two: Scope and content recommendations

If an EU member state decides to undertake a spillover noting that the EU Commission “sees a strong need analysis, it follows that it should direct the focus and to obtain increased knowledge of the tax laws and methodology towards analysing those policy areas practices of all 28 EU Member States…”70 Here, that have the greatest potential impacts on the tax “aggressive tax planning” was defined as: systems of developing countries and should not “taking advantage of the technicalities of a restrict the scope to areas of less relevance. This tax system or of mismatches between two or chapter outlines indicative sets of issues to consider more tax systems for the purpose of reducing in undertaking spillover analyses and suggests tax liability. It may result in double deductions questions that need to be posed to mitigate the risk of (e.g. the same cost is deducted both in the an analysis not capturing all of a member state’s tax state of source and residence) and double spillover impacts sufficiently rigorously. non-taxation (e.g. income which is not taxed in the source state is exempt in the state of The chapter presents questions concerning potential residence).” spillovers from the domestic regulations and international engagements/agreements of EU member The 2012 recommendation came together with the states. All questions are listed only once although European Commission’s Action Plan to strengthen 71 some could apply to several of the categorised areas. the fight against tax fraud and and its Recommendation regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters.72 Domestic rules of EU member In 2015, the Commission commissioned a study states – aggressive tax planning which identified 33 indicators of ATP structures.73 The structures indicators that are relevant to developing countries are included in the policy measures listed below, which are In 2012, the European Commission’s Directorate- divided into those with potentially negative spillovers, General for Taxation and Union put forward and those with potentially positive spillovers. a recommendation on aggressive tax planning (ATP),

14 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Negative spillovers

Has the analysis considered potentially negative spillovers from the policy areas and measures listed below? If not, why not?

Table 2: Sources of potentially negative spillovers in relation to domestic rules

Capital Gains tax • the headline tax rate for CIT or capital gains • rules decreasing the tax base of CIT or capital gains • the signalling effect (tax competition) of recent or planned changes in tax rates. Corporate Income Tax • group taxation with acquisition holding company allowed • excess profits rulings

• permitting non-resident companies Residence Rules • having nationally incorporated companies deemed not tax-resident if management or company control is in another state

Intellectual property • minimal/negligible taxation of capital gains (fair market value) upon transfer of IP rules and Research and patent box or other preferential tax treatment of income from IP Development rules • R&D going beyond direct cost reimbursement

Transfer Pricing rules (TP) • ineffective TP rules or ineffective enforcement of these

• generous tax exemptions or deductions for dividends received • generous tax exemptions or deductions for dividends paid • from intra-group interest costs • tax deduction allowed for deemed interest costs on debt with low or no Interests, Royalties and interest Dividends • notional interest deduction for share capital • low or no WHT on royalties, interests, dividends paid and on their various equivalents e.g. buy-back of shares • non-uniform WHT rates on different types of payments

• punishing developing countries for having low administrative capacity, for instance by demanding reciprocity or full implementation of OECD’s International cooperation BEPS actions as a requirement for bilateral or international information exchange arrangements

• rules likely to favour income arising outside the member state (ring- fencing of domestic economy) • any rule, regulation or administrative practice directly or indirectly General affecting the effective tax rate for CIT negatively, capital gains or other type of income including income from royalties, interests or dividends • features of the tax system that have been negatively reviewed in the (FSI), www.financialsecrecyindex.com

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 15 Positive spillovers

Many tax policy measures enacted by EU countries can have substantial positive spillovers in developing countries, as outlined in the following table.

Has the analysis considered potentially positive spillovers from the policy areas and measures listed below? If not, why not?

Table 3: Sources of potentially positive spillovers in relation to domestic tax rules

Residence Rules • rules for controlled foreign corporations (CFC)

Interests, Royalties and • taxation of benefits from no/low interest on debt Dividends • interest-limitation rules

Withholding Taxes • beneficial-owner test for reduction of withholding tax on dividends

• implementing country-by-country reporting (CBCR) requirement and making it available to the public • publishing core elements of advanced pricing agreements (APAs) and other tax rulings including annual overviews of how many have been made and with which companies, and how many have been exchanged and with which countries • requiring financial accounts of all limited liability entities to be on public record, Transparency measures including trusts and foundations recorded on a central register which discloses the trust accounts, donors, trustees and beneficiaries • provisions for the identification of beneficial ownership, i.e. who benefits from ownership of an asset (for example, bank account, trust, property) and yet nominally does not own the asset because it is registered under another name • publication of annual cost of statutory and discretionary tax incentives offered to companies

• automatic exchange of relevant financial account information and CBCR data with tax authorities of other countries, including developing countries • automatic exchange of APAs and other tax rulings related to preferential regimes, International cooperation with tax authorities of other countries, including developing countries • having routine dialogues with tax authorities in developing countries and inviting them to suggest areas of concern in relation to spillovers

• general anti-avoidance rules to counter hybrid structures and other ATP structures • no tax deductions independent of tax treatment in developing countries • rules to counter a mismatch in tax qualification of a domestic company or business partnership between own state and a foreign state (hybrid mismatch rules) General anti-abuse • CFC rules on income received from investment or passive sources including interest, measures dividends, rents and royalties from unrelated parties; from purchasing goods from related parties or selling goods to related parties, where the goods are both produced for and used outside the CFC country; from performing services outside the CFC country for related parties; from non-operating, insubstantial, or passive businesses

16 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . 76 EU member states’ activities and . Some spillovers arise from the abuse of DTTs, but others come about because DTTs are meant abroad to divide taxing rights to prevent double taxation, but often award more of them to residence countries, thus Tax policies promoted in international organisations unfairly limiting the capacity of developing countries to like the EU and OECD generally have bigger impacts tax companies.77 The result is that all too often financial on developing countries than those of any individual resources are transferred untaxed or minimally taxed EU country. Hence, supporting the formation of a truly from poor to rich countries. Based on research on 74 global intergovernmental body on tax should be more than 500 binding treaties signed by lower- seen as vital for all EU member states. However, in this income countries, a 2016 ActionAid report argues that Guiding Framework we have chosen to discuss only EU member states should invite developing country bilateral policy-making. Listed below are three areas treaty partners to renegotiate or cancel those existing where EU member states, unilaterally or bilaterally, can DTTs that might excessively limit the taxing rights of change policies to improve spillovers in developing these partners.78 countries: DTTs, DFIs, and state involvement in companies’ overseas investments. National spillover analysis of DTTs can help to scrutinise these problems and create positive spillovers. With the Dutch and Irish spillover analyses in mind, it is Spillovers from Double Taxation Treaties important to stress that while spillovers from DTTs are important they do not provide the full picture. Often DTTs are agreements between countries that divide spillovers arise from DTTs in their interactions with the taxing rights of the countries that have signed the aggressive tax planning measures of domestic and ostensibly intend to eliminate double taxation tax systems, typically some of those listed above.79 of individuals/companies operating in more than Moreover, many developing countries have no or only one country. DTTs determine when, how and even few DTTs, but still suffer from various types of tax if developing countries can tax foreign-owned spillovers. corporations that are making money within their borders. Like most treaties, DTTs commonly override Has the analysis considered potential spillovers from other national laws. DTTs can also facilitate tax the policy areas and measures listed below? If not, avoidance schemes, as seen in the cases of Google75 why not?

Table 4: Sources of potential spillovers in relation to Double Taxation Treaties

• the possible abuse of DTTs by investors from the member state and from other residence countries using the member state as a conduit • the possible abuse by businesses in developing country using DTTs to “roundtrip” and disguise their domestic investments as FDI • treating the OECD’s model tax treaty as the starting point in negotiations on DTTs, and requiring developing countries to make some concessions if they want to use the UN model tax treaty as a basis instead • automatic adjustment of transfer pricing described in OECD’s model convention article 9. Negative • the 26 elements in DTTs that the ActionAid Tax Treaties Dataset identifies as crucial for developing spillovers countries, including rules on: – of services, delivery exceptions, stock agent, insurance, construction length and supervisory activities – WHT on dividends, royalties, interests, threshold for shareholding qualification, management and technical fees – source taxation of capital gains, earnings of top-level managerial officials, social security pensions and other income – other elements such as “force of attraction”, office payments, shipping rights

• strong anti-abuse clauses in DTTs • a national code of conduct on tax treaty negotiation ensuring: – publication of the policy objectives of upcoming DTTs an impact assessment prior to negotiating DTTs Positive – a consultation with experts and an open discussion of the overall rationale for developing countries to spillovers sign DTTs (to date empirical studies are inconclusive on the question of whether concluding a tax treaty increases FDI in a developing country) – the national legislature debates and formally ratifies any DTT • publication of a draft version prior to signature

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 17 Spillovers from development finance institutions

DFIs are bilateral or multilateral institutions supported by states and which generally have a mandate to provide finance to the private sector for investments that promote development.80 DFIs are mandated to promote investments where commercial markets do not and thus bridge private financing and public policy by encouraging investments that yield development impacts. Thus, DFIs should also promote responsible tax practices and safeguard against harmful ones.81

Has the analysis considered potential spillovers from the policy areas and measures listed below? If not, why not?

Table 5: Sources of potentially positive spillovers in relation to rules concerning DFIs

• DFIs taking an active role in promoting responsible tax practices and having indicators that measure the effect of their investments on tax payments and human rights, and giving these issues a prominent place in their annual reports • DFIs implementing an effective policy that triggers appropriate action and discourages Positive partner companies from using tax havens, including having due diligence requirements when tax spillovers havens appear in the corporate structure of a partner • DFIs having a code of conduct that requires them to have safeguard policies for the companies they partner or fund (including financial intermediaries), and which include demanding public CBCR and transparency about beneficial ownership

18 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . Chapter three: Process recommendations

This chapter briefly presents a list of recommendations the issues are likely to be complex, others open on the process and practical arrangements for to differing interpretations and it is important conducting a national tax spillover analysis. How the to allow time for these discussions among the process is conducted is critical to the outcome. The stakeholders. key must be to ensure that the end goal is to turn improved knowledge into improved policy decisions. 7. An external, independent party should be contracted to conduct the spillover analysis. This 1. The spillover analysis should cover all of the party should be given access to all the necessary member state’s tax rules and practices which official data to conduct a comprehensive and may give rise to spillovers in developing countries, including those which have indirect effects. Thus, rigorous study and be able to treat some of the efforts must be made to identify which tax rules official information it accesses on a confidential are key so that none are excluded. In this process, or anonymous basis if necessary. there should be widespread consultation among stakeholders. 8. The government should make a commitment to publishing the analysis in full. 2. There should be agreement among all the stakeholders on what data needs to be collected 9. There should be a commitment on the part of for the study and an assurance that all those with the government commissioning the analysis to access to this data will provide it. act on its findings. Where the analysis identifies the existence or risk of negative spillovers in 3. All relevant government departments should developing countries, the government should be involved in preparing the analysis, including outline the actions it intends to take in response the Ministries of Foreign Affairs, Business and and over what timescales. Finance, and the administrative departments responsible for taxation, aid and development policies. All should agree on the objectives of the analysis and the values that guide it. Actions needed independent of any spillover analysis 4. The analysis should include the participation of relevant stakeholders such as parliamentary Independently of conducting a spillover analysis, all committees, civil society groups, academics EU member states should ensure there are adequate and the business community. One option is to institutional arrangements for collecting data establish a multi-stakeholder group that could concerning tax policy. All EU member states should guide or at least give strong input to the process. ensure that their data collection at least matches This group could help design and examine the that of the Netherlands, where every year the Dutch terms of reference for the analysis, ensuring it Central Statistics Bureau (DCSB) reports how much covers all necessary areas and processes. capital income the Netherlands receives from its FDI stock abroad from withholding taxes on incoming 5. There should be a period for a public consultation interest and dividend payments. Moreover, the DCSB and written submissions, and these inputs should be explicitly considered in the final report. distinguishes between interest and dividends, and Transparency and public accountability should classifies income that can be attributed to special be promoted in as many steps of the analysis financial institutions (mailbox companies) separately. as possible, including public access to working For tax spillover analyses in most EU member states documents of the steering group, drafts and it will be relevant to collect the data on capital income discussions of the research, and the selection received from FDI stock abroad, and to record and and hiring of a contractor. distinguish between the flows coming from withholding taxes on incoming interest and on dividend payments, 6. There should be a period of debate and scrutiny as well as classifying the flows attributed to different over drafts of the analysis produced. Some of types of financial entities, e.g. mailbox companies.82

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 19 Conclusion

In this Guiding Framework ActionAid presents Scope and content recommendations recommendations for the method, content and process of conducting future spillover analyses. Chapter 2 lists the most important policy measure a It has been developed with inputs from experts national tax spillover analysis should take into account. from across Europe and Africa and argues that EU These include domestic rules enabling Aggressive Tax member states need to conduct national tax spillover Planning, for instance “ring-fencing” structures, rules analyses to comply with their commitments on policy indirectly affecting the effective tax rate for corporate coherence for development (PCD), human rights and income, capital gains, royalties, interest, dividends, democracy. Moreover, it argues that future spillover as well as intellectual property rules, research and analyses need to adopt a broader scope than the development rules and transfer pricing rules. Dutch and Irish analyses did, and take into account, among others, transparency measures, international Importantly, a spillover analysis should also consider cooperation and potential positive spillover effects. the many potential positive spillover effects from: Transparency measures including publishing core To reach the end goal of turning improved elements of tax rulings, companies’ Country-by- knowledge into improved policy decisions more Country filings and the identity of beneficial ownership dialogue is needed both across national borders of bank account, trust, and property. A spillover and across ministries and institutional “silos” within analysis should also analyse features of the national the EU member states. ActionAid hopes that the tax system, if any, that has been negatively reviewed recommendations will motivate such dialogues. in the financial secrecy index.

Anti-abuse measures including Controlled Foreign Methodological recommendations Corporation rules, beneficial-ownership rules, and general anti-avoidance rules. Chapter 1 recommends that the analytical setup of a national tax spillover analysis includes: International cooperation including sharing of Country- by-Country reporting data, and automatic exchange • A formulation of the intended objectives, enabling of information about financial accounts, Advanced a clear evaluation of the outcome. Price Agreements and other tax rulings. • A broad qualitative analysis of policy areas that have the most impact on developing countries’ Moreover, a spillover analysis should address EU tax revenues and their capacity to meet the member states’ bilateral activities and activities abroad Sustainable Development Goals and human including Double Taxation Treaties, Development rights obligations. Finance Institutions, and state involvement in national • Quantitative methods employed where possible companies’ overseas investments and . including analyses of the financial volume, rate and composition effects in developing countries. • An interpretive and comparative analysis Process recommendations providing the basis for a policy coherence for development analysis of the member state’s Chapter 3 presents a list of principles recommended commitments, policy targets and indicators for the process surrounding a spillover analysis. The in relevant development areas as well as the member state concerned should ensure that: parallel policy targets and indicators in relevant developing countries. • A comprehensive analytical scope covers all tax • The identification of case studies, on which a rules which may give rise to spillovers, including discussion pointing towards required policy those which have indirect or systemic effects. adjustments as well as additional research can be • All the relevant government departments are based. included in the process and agree on the

20 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . objectives and guiding values of spillover • The analysis is published in full, and where there analysis, and commit themselves to provide the is a risk of negative spillovers on developing necessary data. countries, the government commits to prompt • Relevant parliamentary committees, civil society action to curb this risk. groups, academia and the business community are included in the process, and that external Note of caution: No spillover analyses should delay submissions are considered in the final report. changing policies already known to be harmful. • The contracted party, if applicable, is given access to all the necessary data.

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 21 References

1. To illustrate the numerous scandals, take a single 12-month period starting December 2014. It included the following scandals: # Two separate studies on the mining industry published in 2015 showed that the Netherlands had been used to minimise tax payments in Malawi and Greece. See SOMO (2015): https://www.somo.nl/fools-gold-eldorado-gold/; and ActionAid (2015),“An Extractive Affair: How one Australian mining company’s tax dealings are costing the world’s poorest country millions”: http://www.actionaid.org/publications/extractive-affair-how-one-australian-mining-companys-tax-dealings-are-costing-worlds-po # The LuxLeaks dossier exposed tax rulings with hundreds of multinational companies in Luxembourg. See ICIJ (2014), Luxembourg Leaks: global companies’ secrets exposed: https://www.icij.org/project/luxembourg-leaks # The SwissLeaks laid bare the financial information of more than 100,000 bank clients in a Swiss bank. See ICIJ (2014), : Murky cash sheltered by bank secrecy: https://www.icij.org/project/swiss-leaks # A report showed that McDonald’s reported a turnover of more than €3.7 billion in one subsidiary with 13 employees in Luxembourg from 2009–13. See EPSU et al. (2015), Unhappy meal: €1 billion in tax avoidance on the menu at McDonald’s, p. 11. Published 24 February 2015: http://www.notaxfraud.eu/sites/default/files/reports/enUNHAPPYMEAL_final.pdf) # A report detailed some of the tax saving effects Walmart achieved through subsidiaries in Ireland, the Netherlands, Luxembourg, Spain, Cyprus and Switzerland, despite not having any stores there. See Americans for Tax Fairness (2015), The Walmart Web: How the world’s biggest corporation secretly uses tax havens to dodge taxes, p. 2. Published June 2015: https://americansfortaxfairness.org/files/TheWalmartWeb-June-2015-FINAL1.pdf

2. See IMF (2014), Staff Report, Spillovers in international corporate taxation, pp. 1–3, 9–5: http://www.imf.org/~/media/Websites/IMF/Imported/external/np/pp/eng/2014/_050914pdf.ashx. The OECD acknowledges that the impact on developing countries of cross-border tax avoidance exceeds that of official development assistance (ODA) by a considerable margin. See OECD (2015), Tax Inspectors Without Borders, An OECD–UNDP partnership to tackle domestic resource mobilisation with a practical hands-on approach: https://www.oecd.org/dac/financing-sustainable-development/third-UN-conference-on-financing-for-development-addis-tax-inspectors-flyer.pdf. See Global Financial Integrity (GFI) (2017): http://www.gfintegrity.org/ Global Financial Integrity (GFI) is a non-profit, Washington DC- based research and advisory organisation which in its latest report estimates that the fraudulent mis-invoicing of trade transactions is the largest component of from developing countries, accounting for 83.4% of all illicit flows – highlighting that any effort to significantly curtail illicit financial flows must address trade mis-invoicing. Moreover, as a percentage of GDP, sub-Saharan Africa suffers the biggest loss of illicit capital. Illicit outflows omfr the region averaged 6.1% of GDP annually. Globally, illicit financial outflows averaged 4.0% of GDP.

3. For more information see United Nation’s Sustainable Development Knowledge Platform (Accessed May 2017): https://sustainabledevelopment.un.org/post2015/summit

4. See European Commission (2015), Commission Staff Working Document, Policy Coherence for Development 2015 EU Report: http://ec.europa.eu/europeaid/sites/devco/files/policy-coherence-for-development-2015-eu-report_en.pdf

5. The European Parliament supported these measures and took an even stronger position on tax issues in its resolution on the 2015 EU Report on PCD4 (points 33 and 34).

6. Richard Murphy & Andrew Baker, 2017, “Tax Spillover: A New Framework” published in a partnership between the All-Party Parliamentary Group on Inclusive Growth (APPG) and the Sheffield Political Economy Research Institute (SPERI), written by Andrew Baker (University of Sheffield) and Richard Murphy (City University) 2017, see https://www.inclusivegrowth.co.uk/appg_publications/tax-spillover-new-framework/

7. https://www.financialsecrecyindex.com/

8. See EU Commission (2015), Staff working document Collect more – Spend better: https://ec.europa.eu/europeaid/staff-working-document-collect-more-spend-better_en

9. See Resolution adopted by the General Assembly on 27 July 2015: Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa Action Agenda) (A/RES/69/313): https://documents-dds-ny.un.org/doc/UNDOC/GEN/N15/232/22/PDF/N1523222.pdf?OpenElement

10. See above note 1.

11. See Action Aid (2015). “An Extractive Affair: How one Australian mining company’s tax dealings are costing the world’s poorest country millions”. Published 17 June 2015: http://www.actionaid.org/publications/extractive-affair-how-one-australian-mining-companys-tax-dealings-are-costing-worlds-po

12. Based on front line HIV/AIDS treatment costing USD100 per year: http://www.unaids.org/en/resources/presscentre/pressreleaseandstatementarchive/2015/july/20150714_PR_MDG6report

13. Calculation assumes an annual salary of USD2,500. See e.g. https://www.theguardian.com/world/2007/aug/19/1

14. See ICIJ (2014), Luxembourg Leaks: global companies’ secrets exposed: https://www.icij.org/project/luxembourg-leaks

15. Ibid.

16. Read more about the SwissLeaks scandal at https://projects.icij.org/swiss-leaks/

17. The members of the Financial Transparency Coalition are listed at: https://financialtransparency.org/

22 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . 18. See the Financial Transparency Coalition, “SwissLeaks Through a Different Lens” Accessed May 2018: http://www.swissleaksreviewed. org/#viewing-swissleaks-differently

19. See OECD (2015), Tax Inspectors Without Borders: An OECD–UNDP partnership to tackle domestic resource mobilisation with a practical hands-on approach: https://www.oecd.org/dac/financing-sustainable-development/third-UN-conference-on-financing-for-development-addis-tax-inspectors-flyer.pdf

20. IMF, Working Paper: Base Erosion, Profit Shifting and Developing Countrie, p. 21, Figure 3. Illustrative Revenue Loss Calculations: https://www.imf.org/external/pubs/ft/wp/2015/wp15118.pdf

21. For further information about how states compete for mobile tax bases in a globalised economy, and how this tax competition undermines the fiscal self-determination of states and exacerbates inequalities of income and wealth both within countries and across borders, see Dietsch, P. and Rixen, T. (2012), “Tax Competition and Inequality – The Case for Global Tax Governance”: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1488066

22. For an introduction to tax competition see (2012), “Tax us if you can”, 2nd edition, p. 8: “Nation states are not in competition with each other in the same way that firms compete for clients. Competition can only exist in that way when consumers (in this case entire populations) can choose between competing suppliers. Trying to apply the microeconomic theory of the firm to nation states is therefore false in theory and dangerous in practice; in microeconomic theory, if a company fails, it will be replaced by another company. That is not true when nation states fail; then the international community must intervene to prevent social and economic meltdown. What this suggests is that the notion of tax competition is based on political ideology rather than economic theory, and it promotes economic injustice. In practice, it favours the interests of the tiny number of people who own the majority of the world’s businesses. Far from promoting the efficient allocation of the financial capital, tax competition encourages mobile capital to scour the world in search of tax breaks and subsidies, which negates the entire basis of globalisation theory. As a result, tax competition invariably results in social harm and has to be curtailed.”

23. See Hearson, M. (2013), “Tax incentives cost $138 billion…?” (Accessed May 2017): http://www.actionaid.org/2013/07/tax-incentives-cost-138-billion

24. IMF (2014), Staff Report, Spillovers in international corporate taxation, pp. 1–3, 9–5: http://www.imf.org/~/media/Websites/IMF/Imported/external/np/pp/eng/2014/_050914pdf.ashx. The executive summary of the IMF 2014 Staff Report notes, in summary, that “The analysis also finds that spillovers are especially marked and important for developing countries. These countries typically derive a greater proportion of their revenue from corporate tax; TA experience provides many examples in which the sums at stake in international tax issues are large relative to their overall revenues; and the empirics reported here suggest that spillovers are especially strong for them.” See IMF (2014), Staff Report, Spillovers in international corporate taxation, pp. 1–3, 9–5: http://www.imf.org/~/media/Websites/IMF/Imported/external/np/pp/eng/2014/_050914pdf.ashx

25. See UN (2014), “Report of the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda Carmona”, p. 21: http://www.ohchr.org/EN/HRBodies/HRC/RegularSessions/Session26/Documents/A_HRC_26_28_ENG.doc The declaration that “government of the people, by the people, for the people, shall not perish from the earth” is from the Gettysburg Address, a speech by US President Abraham Lincoln delivered during the American Civil War on the afternoon of Thursday 19 November 1863.

26. See the Universal Declaration of Human Rights including Article 25 and Article 26 about everyone’s right to a minimum level of “living standards” . Universal Declaration of Human Rights (1948): http://www.un.org/en/universal-declaration-human-rights/ Article 25. (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. (2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection. Article 26. (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit. (2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace. (3) Parents have a prior right to choose the kind of education that shall be given to their children.

27. Ibid.

28. See Dr Attiya Waris, Senior Lecturer at Commercial Law Department, School of Law, University of Nairobi, in CONCORD (2015), “Spotlight 2015: The Role of the EU in ensuring Global Tax Justice.” by Newsroom, 30 April 2015, p. 3: http://library.concordeurope.org/record/1632/files/DEEEP-PAPER-2016-001.pdf

29. Ibid.

30. See the United Nations General Assembly Human Rights Council, Twenty-sixth session, Agenda item 3, Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development (2014). “Report of the Special Rapporteur on extreme poverty and human rights”: http://www.ohchr.org/EN/HRBodies/HRC/RegularSessions/Session26/Documents/A_HRC_26_28_ENG.doc

31. Further the UN 2014 “Report of the Special Rapporteur on extreme poverty and human rights” recommends that: 80. With regard to international cooperation and extraterritorial impact, each State should refrain from any conduct that impairs the ability of another State to raise revenue as required by their human rights commitments, and cooperate in creating an international environment that enables all States to fulfil their human rights obligations. 81.For the above-mentioned purpose, States should: (a) Actively pursue international cooperation in tax matters, working towards a multilateral regime for tax transparency that tackles tax abuse (b) Enact clear legislation and regulations to ensure that companies domiciled in their territory respect human rights in their operations everywhere, including in tax planning practices ©????

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 23 (d) Develop a system for more systematic and regular exchange of information between tax authorities, laying the foundations for an eventual multilateral, global system of automatic tax information exchange (e) Promote and engage in forums for tax cooperation that guarantee participation by developing countries; in particular, commit more resources to the Committee of Experts on International Cooperation in Tax Matters, support its upgrade to intergovernmental status, and support the implementation of its Model Tax Convention and the Code of Conduct on Cooperation in Combating International Tax Evasion and Avoidance (f) Adopt country-by-country reporting standards for all transnational corporations; in the case of extractive industries, also enforce project-by-project disclosure standards, such as those embodied in the Dodd-Frank Wall Street Reform and Consumer Protection Act and comparable European Union legislation, and apply them to all extractive industry companies listed on their stock exchanges (g) Adopt a framework that commits it to full disclosure of beneficial ownership of registered companies through national public registries;

32. See more in CEDAW (1979), Article 2 of the Convention on the Elimination of all forms of Discrimination against Women (CEDAW): http://www.un.org/womenwatch/daw/cedaw/text/econvention.htm#article2

33. Read more about State responsibility for the extraterritorial impacts of tax abuse on women’s rights in Switzerland (2016) (Accessed May 2017): https://www.yumpu.com/en/document/view/56280936/switzerland

34. The EU seeks to use policy coherence for development to take account of development objectives in all of its policies that are likely to affect developing countries. It aims at minimising contradictions and building synergies between different EU policies to benefit developing countries and increase the effectiveness of development cooperation. See EU Commission, “International Cooperation – Building partnerships for change in developing countries” (Accessed June 2017): https://ec.europa.eu/europeaid/policies/policy-coherence-development_en

35. See European Commission (2010), Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee: Tax and Development. COM, Vol. 163, final: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2010:0163:FIN

36. See EU Commission (2015), Staff working document Collect more – Spend better: https://ec.europa.eu/europeaid/sites/devco/files/swd-collect-more-spend-better.pdf and see the 2016 Spring Meetings of the International Monetary Fund (IMF) and World Bank Group: http://www.imf.org/external/POS_Meetings/SeminarDetails.aspx?SeminarId=119

37. See EU Commission (2015), “Policy Coherence for Development (PCD) 2015 EU Report”: https://ec.europa.eu/europeaid/sites/devco/files/pcd-report-2015_en.pdf

38. Source: EU Commission (2015), EU Commission’s 2015 EU Report on PCD: http://ec.europa.eu/europeaid/sites/devco/files/policy-coherence-for-development-2015-eu-report_en.pdf

39. See European Parliament (2016), “European Parliament resolution of 7 June 2016 on the EU 2015 Report on Policy Coherence for Development”, points n. 33 and 34: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2016-0246+0+DOC+XML+V0//EN

40. See European Parliament (2015), “Report on tax avoidance and tax evasion as challenges for governance, social protection and development in developing countries”, Committee on Development Rapporteur: Elly Schlein: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+REPORT+A8-2015-0184+0+DOC+XML+V0//EN

41. Source: 2015 EU Staff Working Document,Collect More – Spend Better https://ec.europa.eu/europeaid/staff-working-document-collect-more-spend-better_en

42. For further information visit the homepage of the Financing for Development Conference in Addis Ababa in 2015 (Accessed May 2017): http://www.un.org/esa/ffd/ffd3/

43. For further information visit the homepage for the 2030 Agenda for Sustainable Development (Accessed May 2017): https://sustainabledevelopment.un.org/post2015/summit

44. For further information visit the homepage for the Addis Tax Initiative (Accessed May 2017): https://www.addistaxinitiative.net/

45. Ibid.

46. See UNDP’s Strengthening the Governance of Finance (GCCF) (2011), Busan Partnership for Effective Development Cooperation, Outcome Document, paragraph 9: https://www.oecd.org/development/effectiveness/49650173.pdf

47. See the full report of the Dutch Spillover Analysis (IBFD) (2013), Onderzoek belastingverdragen met ontwikkelingslanden. FEZ/IM-354/DDE: https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/brieven/2013/08/30/onderzoek-belastingverdragen /onderzoek-belastingverdragen.pdf

48. Read more about Martin Hearson’s reflections and critique of Irish and Dutch spillover analyses in “Is it or isn’t it a spillover?”, 16 April 2015 (Accessed May 2017): https://martinhearson.wordpress.com/tag/spillover-analysis/ and read more on the methodological reflections in Murphy & Baker (2017), “Tax Spillover: A New Framework” https://www.inclusivegrowth.co.uk/appg_publications/tax-spillover-new-framework/

49. See the full report of the Irish Spillover Analysis (IBFD) (2015), Possible Effects of the Irish Tax System on Developing Economies: http://www.budget.gov.ie/Budgets/2016/Documents/IBFD_Irish_Spillover_Analysis_Report_pub.pdf

50. Weyzig, F. (2015), Spillover analysis of Irish tax policy: https://francisweyzig.com/2015/10/14/spillover-analysis-of-irish-tax-policy/

51. Martin Hearson (2014) elaborates: “A fundamental weakness of the report, therefore, seems to be unwillingness to look at Ireland’s role in combination with other countries. The LuxLeaks episode in 2015, for example, highlights that Ireland’s interaction with Luxembourg is an important part of aggressive tax planning by some companies, some of which may have operations in developing countries. The most likely damaging spillover takes the form of hiding the profits not necessarily straight from e.g. Zambia, but from a global value chain that includes Zambia and others – including Ireland. It is Ireland’s systemic rather than transaction-specific role that is likely to have greatest

24 Stemming the spills: Guiding framework for undertaking national tax spillover analyses . costs for developing countries. Closer examination of this aspect is therefore a significant omission from the analysis.” Read more in Hearson (2014), “Ireland does spillover analysis: the proof of the pudding will be in the eating”: https://martinhearson.wordpress.com/2014/05/01/ireland-does-spillover-analysis-the-proof-of-the-pudding-will-be-in-the-eating/

52. See above note 2.

53. As Martin Hearson has noted, the IMF’s traditional use of the term “spillover” invites an interpretation where the affected country is a passive victim. But the fact that a developing country is active in signing a treaty or granting tax exemptions to foreign companies does not diminish the impact on it of doing so. Follow Martin Hearson’s work on spillover and double taxation treaties on his blog (Accessed May 2017): https://martinhearson.wordpress.com/tag/spillover-analysis/

54. As summarised in IBFD Spillover Analysis: Possible Effects of the Irish axT System for Developing Economies: “b. Base erosion due to real activities The analysis of base erosion due to real activities is more complex. It relates changes in a country’s corporate tax base to the average tax rate of all other countries one year before. The main specification finds that if the tax rates of all other countries fall by 1 point, the average country’s corporate tax base is reduced by 3.7% because real activities are shifted abroad. Considering that corporate tax rates have fallen by some 5 points worldwide over the last decade, this spillover effect is quite large.

The analysis uses an implied tax base, which is estimated by taking the ratio of corporate tax revenues to GDP (from IMF country reports) and dividing it by the statutory corporate tax rate. This is because comprehensive country data on the size of the corporate tax base are not available. A simple calculation illustrates the approach. If a country’s corporate tax revenues are 5% of GDP and the tax rate is 25%, then the implied tax base is 5% of GDP / 25% = 20% of GDP. The authors point out that statutory tax rates and average effective tax rates are strongly related. As mentioned above, a later extension of the analysis also used average effective tax rates for a sub-group of developing countries. The results are similar to the original analysis, which shows that the findings for tax competition among developing countries themselves are robust. (…) The main specification models base spillovers as a function of GDP-weighted tax rates of all other countries worldwide. (…) To summarise, the econometric analysis finds large spillover effects due to shifts in real activity. However, because the main specification uses GDP weights, it does not focus on tax olicyp in relatively small countries. The analysis provides a global estimate of spillover effects and provides little information about spillover effects caused by Ireland’s tax policy in particular.” Source: Kosters, Lambert; Kool, C.J.M.; Groenewegen, J.; Weyzig, Francis; Bardadin, Anna (2015), Utrecht University Repository https://dspace.library.uu.nl/handle/1874/327640

55. Gravelle, J.G. (2013), Tax Havens: International Tax Avoidance and Evasion. Congressional Research Service Report for Congress (Washington: Congressional Research Service): https://fas.org/sgp/crs/misc/R40623.pdf

56. See http://www.financialsecrecyindex.com/

57. Richard Murphy & Andrew Baker, 2017, “Tax Spillover: A New Framework” published in a partnership between the All-Party Parliamentary Group on Inclusive Growth (APPG) and the Sheffield Political Economy Research Institute (SPERI), written by Andrew Baker (University of Sheffield) and Richard Murphy (City University) 2017, see https://www.inclusivegrowth.co.uk/appg_publications/tax-spillover-new-framework/

58. Read more in Murphy, R. and Baker, A. (2017), “Tax Spillover: A New Framework”. “Irish companies, one resident in that state and the other not (the so called ‘Double Irish’). In that situation, the loss arose to third states that did not ever enjoy the taxes that might have been due on transactions that most would have expected to be recorded in their domains. Such transactions were not recorded as a result of the use of these abusive Dutch and Irish structures, data with regard to which never appeared in the trading relationships between those places and the countries that lost out.” https://www.inclusivegrowth.co.uk/appg_publications/tax-spillover-new-framework/

59. While the dividend and interest flows that are subject to withholding taxes can be estimated from widely available datasets, the volume of royalties and service fees, also affected by treaties’ WHT provisions, is much harder to quantify, see more in Hearson, M., International Centre for Tax and Development (ICTD) (2016), Measuring Tax Treaty Negotiation Outcomes: ActionAid’s dataset: http://www.ictd.ac/ju-download/2-working-papers/99-measuring-tax-treaty-negotiation-outcomes-the-actionaid-tax-treaties-dataset

60. The notorious “Dutch Sandwich” tax abuse structure where royalties are routed between two Irish companies with different residence status (also called “Double Irish”). This creates a situation where the loss arises to third states that do not enjoy the taxes that might have been due on transactions that most would have expected to be recorded in their domains. See Wood, R.W., Forbes (2016): https://www.forbes.com/sites/robertwood/2016/12/22/how-google-saved-3-6-billion-taxes-from-paper-dutch-sandwich/#40edf5721c19

61. The is a tax strategy that some multinational corporations use to lower their corporate tax liability. See for instance Hakim, D. (2014): https://www.nytimes.com/2014/11/15/business/international/the-tax-attraction-between--and-the- netherlands.html?_r=0 or The Tax Justice Network (2014): https://www.taxjustice.net/2014/10/21/offshore-wrapper-week-tax-justice-36/

62. See above note 13.

63. Dutch Government (2013), Annex 5, result chains, Assessing the Impact of PCD in Developing Countries: https://www.rijksoverheid.nl/ binaries/rijksoverheid/documenten/rapporten/2013/10/22/result-chains-to-assess-the-impact-of-policy-coherence-for-development-in- selected-partner-countries/result-chains-to-assess-the-impact-of-policy-coherence-for-development-in-selected-partner-countries.pdf

64. An analysis should not build on benchmarking. However, after an analysis has been completed, the results may be compared to those of other countries after the fact.

65. Volume effect on total investments into developing countries, and total revenue collected. Rate effect, i.e. changes in the applicable rates of various taxes in developing countries. Composition effect one changing the composition of expenses and income of companies operating in developing countries. Composition effect two changing the head rates of and/or revenue obtained from different tax types in developing countries. Read more in Weyzig, Francis (2013), “Evaluation issues in financing for development. Analysing effects of Dutch corporate tax policy on developing countries”, pp. 13–14 (commissioned by the Policy and Operation Evaluation Department (IOB) of the Ministry of Foreign Affairs): https://www.government.nl/binaries/government/documents/reports/2013/11/14/iob-study-evaluation-issues-in-financing-for-development- analysing-effects-of-dutch-corporate-tax-policy-on-developing-countries/iob-study-evaluation-issues-in-financing-for-development.pdf

Stemming the spills: Guiding framework for undertaking national tax spillover analyses 25 66. See Itriago, Deborah. (2011), “Owning Development Taxation to fight poverty”: https://www.oxfam.org/sites/www.oxfam.org/files/ rr-owning-development-domestic-resources-tax-260911-en.pdf

67. For more information about tax, fiscal transparency and public accountability, see ActionAid, (2013), “Bringing taxation into the post-2015 development framework”, p. 7: https://www.actionaid.org.uk/sites/default/files/doc_lib/post_2015_-_tax.pdf and see Keen, Michael (2012), “Taxation and Development – Again”, IMF Working Paper 12/220, p. 21: https://www.imf.org/external/pubs/ft/wp/2012/wp12220.pdf

68. For a good introduction to tax avoidance see the homepage for the Tax Justice Network (Accessed May 2017): http://www.taxjustice.net/faq/tax-avoidance/

69. Volume effect on total investments into developing countries, and total revenue collected. Rate effect, i.e. changes in the applicable rates of various taxes in developing countries. Composition effect one changing the composition of expenses and income of companies operating in developing countries. Composition effect two changing the head rates of and/or revenue obtained from different tax types in developing countries. Read more in Weyzig, Francis (2013), “Evaluation issues in financing for development. Analysing effects of Dutch corporate tax policy on developing countries”, pp. 13–14 (commissioned by the Policy and Operation Evaluation Department (IOB) of the Ministry of Foreign Affairs): https://www.government.nl/binaries/government/documents/reports/2013/11/14/iob-study-evaluation-issues-in-financing-for-development- analysing-effects-of-dutch-corporate-tax-policy-on-developing-countries/iob-study-evaluation-issues-in-financing-for-development.pdf

70. Read more in the EU Commission’s recommendation of 6.12.2012 on aggressive tax planning, C(2012) 8806 final, Brussels, p. 16: https://ec.europa.eu/taxation_customs/publications/taxation-services-papers/taxation-papers_en

71. See EU Commission (2012), An Action Plan to strengthen the fight against tax fraud and tax evasion: https://ec.europa.eu/taxation_ customs/sites/taxation/files/com_2012_722_en.pdf

72. See EU Commission (2012), Recommendation regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters (C(2012) 8805): http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/tax_fraud_evasion/c_2012_8805_en.pdf

73. Source: EU Commission (2015), The EU Commission’s Taxation Papers, Working Paper No. 61. Study on Structures of Aggressive Tax Planning and Indicators: https://ec.europa.eu/taxation_customs/publications/taxation-services-papers/taxation-papers_en

74. Read more in the position signed by more than 30 CSOs: “10 Reasons Why an Intergovernmental UN Tax Body Will Benefit Everyone”. https://www.oxfam.org.uk/blogs/2015/07/un-tax-body-is-good-for-everyone

75. See Zucman, G. (2014), Taxing across borders: tracking personal wealth and corporate profits.The Journal of Economic Perspectives, 28(4), pp. 121–148; in relation to tax paid by in the UK, see House of Commons Committee of Public Accounts, Tax avoidance – Google, Ninth Report of Session 2013–14, http:// www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/112/112.pdf , p 7.

76. It is alleged that the UK’s treaty with Luxembourg allowed Amazon to reduce its taxable presence in the UK. (Bergin, T., “After Google, Amazon to be grilled on UK tax presence”.) Read more in 17 May 2013: http://uk.reuters.com/article/uk-britain-tax-amazon-idUKBRE94G06320130517 ; and in Reuters 15 May 2013: http://uk.reuters.com/article/uk-amazon-britain-tax-idUKBRE94E0GE20130515 and read more in (2013), “Questions for Amazon over pittance it pays in tax”, 16 May 2013, https://www.theguardian.com/technology/2013/may/15/amazon-tax-bill-new-questions The Guardian 23 May 2015: https://www.theguardian.com/technology/2015/may/23/amazon-to-begin-paying-corporation-tax-on-uk-retail-sales .

77. See Martin Hearson’s PhD and blog on international tax treaties (Accessed June 2017): https://martinhearson.wordpress.com/category/ the-politics-of-international-tax/tax-treaties/

78. See Hearson, M. (2016), Measuring Tax Treaty Negotiation Outcomes: The ActionAid Tax Treaties Dataset. Brighton Institute of Development Studies. Available at http://www.ictd.ac/publication/measuring-tax-treaty-negotiation-outcomes-the-actionaid-tax-treaties- dataset/; see also report from ActionAid (2016), “Mistreated”: http://www.actionaid.org/2016/02/mistreated-how-shady-tax-treaties- are-fuelling-inequality-and-poverty. The research paper and dataset analysing 519 tax treaties signed by low- and lower-middle-income countries in Africa and Asia. Those countries classified as low and lower-middle income by the World Bank. The analysis of each of these treaties is freely available on the websites of ActionAid and the ICTD. For further detail on the research

79. ActionAid’s report “Sweet Nothings” tells of how an old treaty between Ireland and Zambia signed in 1971 decades later results in Zambia losing millions of dollars. Lewis, Mike (2013), ActionAid. “Sweet nothings. The human cost of a British sugar giant avoiding taxes in southern Africa”: https://www.actionaid.org.uk/sites/default/files/publications/sweet_nothings.pdf or more on ActionAid homepage (Accessed May 2017): https://www.actionaid.org.uk/blog/campaigns/2013/03/13/an-irish-stew

80. Read more about DFIs under “Investors in Infrastructure in Developing Countries” at the homepage of the World Bank (Accessed May 2017): http://ppp.worldbank.org/ppp/financing/investors-developing-countries

81. OXFAM (2016), Joint Agency Briefing Paper 10 November: Development Finance Institutions and Responsible Corporate Tax Behaviour: Where we are and The Road Ahead: https://www.oxfam.org/sites/www.oxfam.org/files/bp-dfis-responsible-corporate-tax101116-en.pdf

82. The data and resources available for most EU countries will probably limit the quantitative possibilities for national spillover analyses. But the data is useful for many other purposes than tax spillover analyses on developing countries. See more in SOMO (2013). Should the Netherlands Sign Tax Treaties with Developing Countries? p. 59, https://www.somo.nl/should-the-netherlands-sign-tax-treaties-with-developing-countries/

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